Fixing the Global Economy

Fixing our Global Economy

By Tim Williamson

6 Nov 2010

For some inexplicable reason the some in the US seem to think that the solution to our economic challenges can be found in closing ourselves off from the rest of the world and curling up into a fetal position within our borders.  

Many in the US seem to think that the US is the worlds' preeminent authority and final judge, jury and executioner on what is the best economic course for the entire world.  But our recent policies appear to be myopic and insular, and some might say even protectionist.  Such actions are short-sighted, narrow and detrimental to sustainable local and global growth and prosperity.  The solution for the long-term requires global coordination, cooperation and simplification.  The solution does not lie in making the current system more complex with onerous balance, currency, trade, and reserve rules, but does demand a total and quick paradigm shift away from that which currently exists.  So, is there a better way?

Yes!  There is a better way.

The world needs a big idea. The world needs a massively challenging and glamorous global project.  A project  that captures the imagination, passion, hearts and minds of people everywhere.  One that involves corporate and private enterprise from the very beginning, promotes business creation, growth and expansion, and involves states, governmental agencies and NGO's from around the world.  Such a global project will encourage job creation, foster scientific and technological advancement, help raise the standard of living for many around the world, could potentially stabilize the world economy (and thus local economies), grow businesses, increase global unity and cooperation, bring an end to potential currency wars, unify currently disjointed currencies and central banks, and be a long-term sustainable economic and growth solution for people all across the planet. Is that asking too much?  The scientific, technological and business growth that occurred as a result of the space race, to earth orbit and the moon and beyond, helped local states and local economies in the past several decades.  Just imagine what such a massive concerted global effort would do for the whole planet.  Wars have done the same thing, during the war anyway, but that is not a viable option for anyone today.  Is this the better way?

Presently the world is suffering.  Some economies are stagnant.  People need work, and they need a restoration of confidence in the future. The threat of currency wars loom in our future because of the myopic actions of a few states; but none of this need be so.  Together we can overcome these obstacles.  Together we can move into a brighter more secure future. The current way is no longer viable.  We need to trade the current paradigm for a new way of thinking.  The present system is not working.

There are several possible outcomes if states continue unilateral economic and currency actions rather than working together to solve supra-connected economic challenges - stagnation, continued degradation of jobs and consumer confidence, or war;  or, we can choose to find a way to inspire and motivate the world, thus saving and growing jobs. Which would you choose?  There are options that can pull the world off this perilous path.  There are ways to help end the suffering.  There are ways to get local economies growing by getting the global economy moving, but none of this is possible if the states of the world continue to act as if they are islands alone in the world.  Real, long-term solutions, can only be realized in cooperation with others around the world, not through independent isolationist actions. Those days are long gone.  It's time to change our thinking about the way we conduct our connected lives around the world - we either face this reality, or we disintegrate into clans and enclaves of petty tribes.

Unilateral economic, fiscal and monetary decisions made by any state in isolation from the rest of the global economy and global community will give the people and businesses of that state a false sense of control, a false sense of confidence and growth over the short-term.   But, that short-term feeling is an illusion.  Actions by some states to regulate their state currency also falls into this category.  Yes!   It feels good to see the markets pushing upward, and it may spur some spending for the holiday season, but it is a short-term illusion impacting only Wall Street not ultimately the people on the street.  The recent QE2 (Quantitative Easing)  action by the US Fed was very short sighted, and may even have been a political move to appease US population anxiety over stagnation in its local economy and employment.  The long-term affect of QE2 however will be deleterious and negative for the state and the global economy.  This action by the US Fed was taken myopically and unilaterally.  There is a better way.

The immediate affect of QE2 is that the rest of the states of the world are beginning to distrust the motives of the US, and the commitment of the US, toward sustainable global growth.  No longer do nations have the right to act independently and unilaterally regarding any action that has consequences outside of its borders. It’s illogical.  It’s irrational. It’s irresponsible.  And, it is no longer acceptable to act in such a way. This, by the way, applies to all nations on earth, not just to the US or China. To the vast major of the world, it seems that the US is playing fast and loose with their words, and not being a true global partner and team player.  The US (and others where the shoe fits)  must realize that it is not alone on the planet.  The US is not nor will ever be an island unto itself ever again, and is not the sole arbiter of global policy initiated by its local actions. No state can last and succeed for long if its policies do not recognize the inexorable connection each state has with the rest.  We’re in this together.  Your monetary and fiscal policies and actions affect me, and my decisions affect you.  That is the inescapably truth.  We must learn to work within that truth, or we will face continued global and local economic stagnation and decline for a very long time.  Is that what you want?  Do we want to settle for the illusion of immediacy, or do we want things to be better over the long-term? There is a better way.

With each passing day, the ties that bind the states of the world together are growing irreversibly stronger.  Whether monolithic states realize this or not, any person on the planet can purchase a quality product from anywhere else on the planet and have that product delivered to their door within a few days.  What does that mean for the individual, for businesses, for the states?  It means that individuals all around the world have choices based on an open global market for products at great prices manufactured anywhere on the planet.  It means that businesses will, especially if they want to survive and thrive according to the free market capitalism model, move to those locations offering reduced costs of production - to say that businesses should not move anywhere on the planet to reduce their costs is to deny the most basic principles of capitalism.  It means that states, individuals and businesses either adapt to this new paradigm, and take an active and honest role in developing a unified global system of currency, banking, financing, trade and economics, having put aside their myopic parochial insular tendencies, or they will continue in economic and employment stagnation and will experience long-term decline, no matter the short-term gains from protectionism and isolationism.  There is a better way.

What is this way that may be better?  It is a way that requires the US, China, India, the EU, Brazil and all others around the world to be team players of equal status on the world stage for the sake of the future. It requires that nations base their actions on a global plan and global unity, not just on a local imperative for immediate self-gratification. The world must take a longer-term view, and must have a plan, purpose and goal toward which to work.  Fiscal and monetary regulation can be equated to the control rods in a nuclear reactor - a necessary element whose proper control prevents either meltdown on the one hand, or regulated energy production on the other. It is true that 'we' can not control other governments, but, again, strengthening global cooperation and sharing global responsibility for the stability and growth of the planet can be done, but not unilaterally.  It requires a commitment to a vision of growth and prosperity for the whole world, not just for or by one nation, when in fact no one nation will ever again succeed in the long run without the other nations of the earth as their friends, partners and neighbors.  It means that if we are serious about securing a better future for our children all around the world, then the states and people of the world must realize that it can only be done by a union of the states of the world, not as a disjointed association of myopic self-serving entities. The technological reality of this is already in place.  Most people know this, but the states are lagging behind reality.

Neither the US economy, nor that of any individual state, can be repaired in isolation from the rest of the world - that particular genie has left the bottle and will never be put back in again. It should be obvious by now that the success of the US economy is inextricably tied to the success of the global economy. What the US does affects the world, and conversely, what the rest of the world does affects the US. What the EU does affects the whole world.  What Russia, China, India, Saudi Arabia, South Africa and Brazil does affects all of us. This simple statement is an inescapable fact - each of us must learn to be team players on the stage of our interdependent and interconnected world, or face a long-term bleak future for our people, products and services. There is a solution, but only if the states are actually willing to actively and aggressively pursue a solution in cooperation and unity with the rest of the world.

Two things come to mind for possible solutions.  Both of these offered paths to solution come from proven successes found in US history, albeit on the limited local scale of a single nation.  First, we must work to strengthen even more our global markets and our global unity through the WTO, the IMF and especially through the UN, and create a strong global central bank with a single global currency. Doing this would smooth out turbulent economic issues around the world. Such a system was developed and implemented successfully, on and off at various times, in the US in its early history.  It worked exceptionally well for the US, it will do the same for the world today - minus of course the tariffs and protectionism of a young immature nation.

Secondly, we need a massive, inspirational and awe-inspiring project where people and businesses and states can work together toward a common global goal and purpose. Such a project must be so large and visionary that it spurs the creation of new businesses and  technologies and thus improves employment in virtually every state on the planet.  It must be a massive project that captures the imagination and the hearts and minds of people everywhere. Such a goal will create jobs, inspire people, raise consumer confidence, and advance science and technology, and promote measured growth and prosperity throughout the world. Do you have any suggestions?  Think on a massive huge planetary scale.  It can not be something narrow and parochial, but must be challenging, visionary, passionate, long-term, massively huge and truly global so that as many people, businesses and states can be involved as possible. The way in which we are intimately connected with other states around the world requires a massive global project, not just projects particular to one state, in order for there to be long-term success and prosperity for all.  An awe-inspiring project of this magnitude can only be done on a global scale. No one nation, or business, or individual has the resources necessary to capture the hearts and minds of the planet, or to encourage job creation and economic growth that will positively affect local economies globally.

A massive concerted global effort of this magnitude would pull the world together and give us purpose and direction, continuity, economic growth and sustainability, and a common identity.  It could pull the world out of the economic doldrums.  Let’s bring this discussion down to earth, ... so to speak. In many cultures, languages and nations on earth, there is a saying that basically goes, 'people die for lack of vision'. How is that applicable today? What does that saying mean? Most people in the world, if they want or need something, set themselves a goal, then work toward that goal. Let's say you want a new and bigger home or automobile for your family. How do you go about getting it? Unless you're already wealthy, you set the attainment of that object as your goal. You make a plan for yourself and your family so that you can achieve your objective. In other words, you work toward your goal. What is the result of you and your family working toward that common, collective, goal? If you work hard, plan, and you are creative and innovative, you will get that which you have set your mind to get. It wasn't the money you were after, but rather the achievement of the goal.

How was the goal defined and expressed to your family? Did you say to your family that this is something that we need collectively, and that it is very important for us, and that it will take commitment on the part of all of us, working together, before we can get it? Did you inspire your family with your vision?  Did you motivate them to achieve this common goal? Was it necessary to keep the vision of the attainment of that goal before yourself and your family?  What ancillary benefits are associated with having gained your collective goal - family unity, security, maybe even a new family business enterprise, happiness for you and your family, and even some wealth along the way. It was not the pursuit of wealth that got you there, but rather the pursuit of the goal that made it possible. In other words, money, by itself rarely motivates, but a specific goal does motivate. A specific goal inspires creativity, encourages action. The very pursuit thereof is a reward in and of itself.  This was not a selfish goal. It was not just for you and you alone, but something good for the whole family, in many many different ways.

The same logic is applicable to business - no goal, no vision, no purpose beyond just making money, then no long-term success.

The same is also true for states, and yes, even the entire planet today - no goal, no vision, no purpose, then no long-term success.

By working together, we can offer a better future to our children, but not by ourselves - that bird has left the nest, never to return again. Isolating ourselves, and putting up any protectionist policies - QE2, currency regulation, multiple currencies, numerous central banks - are the old paradigm and must now go the way of history and the dinosaurs.

There is a better way.

Tim Williamson

Alabama, USA

nanoproducer@gmail.com

1-205-765-6090